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<p>The basis on which levels of support provided to biomass technologies is calculated
varies according to each scheme.</p><p> </p><p>(a) Legislation[1] requires a series
of factors to be taken into account when setting Renewables Obligation (RO) support
levels, including the generation costs and revenues for each technology; the desirability
of securing long-term growth and industry viability as well as costs to consumers
and impacts on the market for Renewable Obligation Certificates. The most recent comprehensive
review of RO support levels was completed in 2012[2].</p><p>(b) Strike prices awarded
to successful projects in Contracts for Difference (CfD) allocation rounds are determined
through a competitive bidding process[3]. Strike prices for biomass projects that
were awarded contracts under the Financial Investment Decision Enabling for Renewables
programme, an early form of CfDs, were set out in the Electricity Market Reform Delivery
Plan and Annex B: Strike Price Methodology [4].</p><p>(c) In the last review of Feed-in
Tariff levels for Anaerobic Digestion projects undertaken in 2016[5], a return on
investment of 9.1% was assumed.</p><p>(d) Renewable Heat Incentive (RHI) tariffs are
set to compensate generators for the added cost of renewable heating, over and above
what would have been paid otherwise. For a given installation, the lifetime cost of
the renewable technology and the alternative system (e.g. oil boiler) are considered.
The RHI tariff is then set using an economic model so that the rate of return targeted
for the applicant population is achieved over the full lifetime of the heating system.</p><p>
</p><p>[1] Section 32D(4) of the Electricity Act 1989, as amended by the Energy Act
2008.</p><p>[2] Renewables Obligation consultation at: <a href="https://www.gov.uk/government/consultations/renewables-obligation-banding-review"
target="_blank">https://www.gov.uk/government/consultations/renewables-obligation-banding-review</a></p><p>[3]
<a href="https://www.gov.uk/government/publications/contracts-for-difference/contract-for-difference"
target="_blank">https://www.gov.uk/government/publications/contracts-for-difference/contract-for-difference</a></p><p>[4]
Electricity Market Reform Delivery Plan and Strike Price Methodology Annex: <a href="https://www.gov.uk/government/publications/electricity-market-reform-delivery-plan"
target="_blank">https://www.gov.uk/government/publications/electricity-market-reform-delivery-plan</a></p><p>[5]
<a href="https://www.gov.uk/government/consultations/review-of-support-for-anaerobic-digestion-and-micro-combined-heat-and-power-under-the-feed-in-tariffs-scheme"
target="_blank">https://www.gov.uk/government/consultations/review-of-support-for-anaerobic-digestion-and-micro-combined-heat-and-power-under-the-feed-in-tariffs-scheme</a></p>
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